NARSINGH BINDAL,KANNOD V. ASSTT. COMMISSIONER OF INCOME TAX, CIRCLE 1(1), UJJAIN

CO 7/IND/2025

AI Insights

The case involves an appeal by the revenue against the order of the CIT(A) which had deleted several additions made by the A.O in the assessment of Narsingh Bindal for the Assessment Year 2018-19. The A.O had made various additions to the income of the assessee under sections 68 and 54F of the Income Tax Act, citing unexplained cash credits and non-submission of required documents. The CIT(A) later deleted these additions, leading to the revenue's appeal. The Tribunal noted the absence of a remand report from the A.O on the additional evidence provided by the assessee and decided to remand the case for a fresh assessment.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 47158 (ITAT-INDORE)
• Appeal Type: Cross Objection
• Pronouncement Date: 07-04-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2018-2019
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAM KUMAR YADAV
• Assessee Lawyers: R.S. DAVE
• Keywords: Set aside; Additional evidence; Unexplained cash credit; Depreciation; Principle of natural justice; TDS
• Section: 143(3); 142(1); 143(1); 68; 54F; 246A

Judgement Text

" Page 1 of 12 आयकर अपीलीय अिधकरण, इंदौर Ɋायपीठ, इंदौर IN THE INCOME TAX APPELLATE TRIBUNAL INDORE BENCH, INDORE BEFORE SHRI B.M. BIYANI, ACCOUNTANT MEMBER AND SHRI PARESH M JOSHI, JUDICIAL MEMBER ITA No.530/Ind/2024 (AY: 2018-19) ACIT-1(1), Ujjain बनाम/ Vs. Narsingh Bindal, 154, M.G. Road, Kannod, Ujjain (PAN: AJHPB1234B) (Revenue/Appellant) (Assessee/Respondent) Cross-Objection No.07/Ind/2025 (AY: 2018-19) Narsingh Bindal, 154, M.G. Road, Kannod, Ujjain (PAN: AJHPB1234B) बनाम/ Vs. ACIT Circle1(1), Ujjain (Assessee/Cross-Objector) (Revenue/Respondent) Assessee by Shri R.S. Dave, AR Revenue by Shri Ram Kumar Yadav, CIT-DR Date of Hearing 01.04.2025 Date of Pronouncement 07.04.2025 आदेश / O R D E R Per Paresh M Joshi, J.M.: This is an appeal filed by the revenue before us challenging the order bearing Number ITBA/NFAC/S/250/2024-25/ 1065026277(1) dated 21.05.2024 of Ld. CIT(A) which is hereinafter referred to as the “Impugned order”. The relevant Narsingh Bindal ITA No530/Ind/2024 & C.O.No.7/Ind/2025 - A.Y.2018-19 Page 2 of 12 Assessment Year is 2018-19 and the corresponding previous year period is from 01.04.2017 to 31.03.2018. 2. FACTUAL MATRIX 2.1 The revenue in Form No.36 has raised following grounds of appeal against the impugned order which are as follows:- “1. Whether on the facts and circumstances of the case the Ld. CIT(A) has erred in restricting the addition of Rs.13,30,000/- without appreciating the facts and evidence as brought into the light by the A.O during assessment proceedings. The Ld. CIT(A) has erred in deleting the disallowance of depreciation of Rs.17,66,114/- without appreciating the facts and evidence brought into the light by the A.O during assessment proceeding. The Ld. CIT(A) has erred in deleting Rs.2,09,00,000/- made u/s 68 without appreciating the facts and evidence brought into light by the A.O during assessment proceeding. The Ld CIT(A) has erred in deleting the addition of Rs.82,35,898/- made on account of disallowance of 5% of the expenses without appreciating the facts and evidence brought into the light by the A.O during assessment proceeding.” 2.2 That as and by way of assessment order bearing No. ITBA/AST/S/143(3)/2021-22/1032455794(1) dated 16.04.2021 the total assessed income of the assessee was computed at Rs.4,16,24,862/- u/s 143(3) read with section 143 (3A) and 143(3B) of Income Tax Act, 1961. 2.3 That in para 3 of the aforesaid assessment order following is recorded:- “3. During the course of e-assessment proceedings, the assessee was asked to submit various details electronically. In response thereto the assessee filed online part reply/details from time to time as given in Narsingh Bindal ITA No530/Ind/2024 & C.O.No.7/Ind/2025 - A.Y.2018-19 Page 3 of 12 the table below and still replies to the queries raised vide questionnaire referred to above remain unanswered. S.No. Notice u/s 142(1) /Letter Fixed for Reply of the assessee 1 01.12.2020 16.12.2020 No reply received. 1 18.12.2020 31.12.2020 Request for adjournment received 1 04.01.2021 10.01.2021 Request for adjournment received 1 15.01.2021 20.01.2021 Part reply received on 20.01.2021. Request for adjournment received. 1 17.02.2021 24.02.2021 No reply received 1 01.03.2021 08.03.2021 Part reply received on 05.03.2021. Request for adjournment received. 1 22.03.2021 A26.03.2021 Part reply received on 26.03.2021. 2.4 That on para 5 of the aforesaid assessment order following is recorded:- “5. As stated above, number of opportunities were provided to the assessee to submit reply to the questionnaires but the assessee did not furnish the complete details/reply called for in respect of the following queries:- “7. Furnish Ledger extract of all the expenses debited to P&L A/c. Further you are requested to furnish complete details alongwith documentary evidences in respect of the following – a) Purchase with complete addresses and PAN of the parties from whom purchases made b) Freight c) salary expenses d) interest expenses. You are also requested to elaborate the applicability and compliance to the TDS provisions as per the Income Tax Act, 1961 in respect of the above mentioned expenses. 9. Please furnish confirmed copies of accounts of sundry creditors shown at Rs.15,34,77,166/-. Also furnish complete addresses of the parties alongwith PAN. 21. You have shown sale of assets other than unquoted shares at Rs.14,00,000/- resulting thereby long term capital gain at Rs.13,41,847/- which you have claimed exempt u/s 54F. Further you have shown purchase of new residential house at Rs.15,00,000/- on 15.03.2018. Please substantiate your claim with documentary evidence alongwith source of investment in plot.” 2.5 That on para 7 of the aforesaid assessment order following is recorded:- Narsingh Bindal ITA No530/Ind/2024 & C.O.No.7/Ind/2025 - A.Y.2018-19 Page 4 of 12 “7.The assessee vide questionnaire dated 01.12.2020 was asked to furnish details as regards addition in capital account as under:- “You have shown addition in capital account amounting to Rs. 29.50.000/- on account of Plot Sales: Rs. 3.22.059/- on account of LIC Maturity Servible Benefit. Rs. 2.09.50.000/- on account of Advance against sales of property. Computation of Capital Gain on sale of plot at Rs. 29.50.000/-may be furnished. Please furnish details/documentary evidences of sources of addition in the capital account during the year under consideration. Please file confirmed copy of the account of the party from whom advance against sale of property received, its PAN, ITR and establish source of investment w.r.t. copy of relevant bank account of the party. Copy of the 'Agreement' should also be filed. Please let this office know with evidence as to when this advance was received and whether any transfer deed has been executed subsequently or not.\" 7.1 The assessee vide reply dated 20.01.2021 has submitted as under:- Additions in Capital Account: The assessee has sold the plot for Rs. 14.00.000/- In F.Y. 2017-18 and for Rs. 15.50,000/- in F.Y. 2016-17 the same has been invested in residential house constructed at Kannod Dist. Dewas added in capital account and debited to the \"House under construction account as shown in Schedule No 6 of the balance sheet costing to Rs. 74.25.777/- and exemption claimed u/s 54F. We are enclosing herewith the copy of the statements of Bank Account No. 891610100017120 Bank of India Branch Kannod and Account No. 53019220682 State Bank of India Branch Kannod for amount of Rs. 3.22.059/- received from the maturity of the LIC. The entries are highlighted in bank statement attached.\" The assessee has not furnished any documentary evidence regarding addition to capital amounting to Rs. 29.50.000/- on account of plot sale except stating that he has sold the plot for Rs.14.00.000/- in FY 2017-18 and Rs 15.50.000/- in FY 2016-17. The assessee further submitted that the same was invested in residential house constructed at Kannod district Dewas. The assessee was also required vide questionnaire as well as query letter dated 17.02.2021 and 22.03.2021 to furnish the following information:- \"You have shown sale of assets other than unquoted shares at Rs. 14,00,000/- resulting thereby long term capital gain at Rs. 13,41,847/- which you have claimed exempt u/s 54F. Further you have Narsingh Bindal ITA No530/Ind/2024 & C.O.No.7/Ind/2025 - A.Y.2018-19 Page 5 of 12 shown purchase of new residential house at Rs. 15,00,000/- on 15-03- 2018. Please substantiate your claim with documentary evidence alongwith source of investment in plot.\" The assessee vide reply dated 26.02.2021 has submitted that with respect to details required for submission of this point, I would like to bring to your kind notice that the relevant documents are currently seized in possession of department of goods and services tax (GST), Central and Central Excise office, Indore in connection with an ongoing investigation in some other matter. We have requested to release the same and a written application I also submitted with this office dated 24.03.2021 which was duly acknowledged on 25.03.2021. we will be able to submit the said documents as soon they are released from the GST department. Hence, no documentary evidence as regards addition in capital account and also to substantiate claim of said income exempt under section 54F has been submitted. Hence, the addition in capital amounting to Rs.29,50,000/- is treated as unexplained Cash Credit of the assessee as per provisions of section 68 of the Income Tax Act, 1961. Hence, an addition of Rs.29,50,000/- is hereby made to the income of the assessee u/s 68 of the Act r.w.s. 115 BBE of the Act and charged to tax accordingly. Penalty proceeding u/s 271AAC of the Act are being initiated separately. 7.2 Further, the assessee has shown addition in capital amounting to Rs.2.09.50.000/- on account of advance against sale of properties. The assessee vide reply dated 20.01.2021 has replied as under- \"Advance against sale of property: Detail of the parties from whom the amount has been received are i) Braj Kishore Goyal, 3-A, Agrawal Nagar, Indore Rs. 70,00,000/- ii) B. R. Goyal infrastructure Pvt Ltd. 3-A, Agrawal Nagar, Indore Rs. 1,39,50,000/- Confirmation from the parties are enclosed.\" The assessee vide questionnaire dated 01.12.2020 was asked to furnish confirmed copy of the account of the party from whom advance against sale of property received, its PAN, ITR and establish source of investment w.r.t. copy of relevant bank account of the party. Copy of the Agreement should also be filed. Please let this office know with evidence as to when this advance was received and whether any transfer deed has been executed subsequently or not. The assessee has not furnished the information called for except furnishing confirmed Narsingh Bindal ITA No530/Ind/2024 & C.O.No.7/Ind/2025 - A.Y.2018-19 Page 6 of 12 copies of accounts of the parties from whom alleged advance against sale of property has been received. Hence, the assessee has failed to substantiate the addition in capital account amounting to Rs. 2,09,50,000/- on account of advance against sale of property and the same is treated as unexplained Cash Credit of the assessee as per provisions of section 68 of the Income Tax Act, 1961. Hence, an addition of Rs.2,09,50,000/- is hereby made to the income of the assessee u/s 68 of the Act r.w.s. 115 BBE of the Act and charged to tax accordingly. Penalty proceeding u/s 271AAC of the Act are being initiated separately.” 2.6 That on para 8 of the aforesaid assessment order following is recorded:- “8. The assessee vide query letter dated 22.03.2021 was asked to furnish complete detail/ledger extract of following Fixed Assets. The assessee vide reply dated 26.03.2021 has furnished documentary evidence of addition to fixed assets in some of the cases but have not furnished documentary evidence in respect of addition to following assets. Accordingly, depreciation claimed in respect of following assets which works out at Rs. 17,66,114/- is disallowed and addition of Rs. 17,66,114/-is made to the income of the assessee as given below:- Particulars of assets Amount of addition made during the year Documentary evidence submitted No/partly Amount of depreciation to be allowed Computer System 988339/- Partly of Rs. 45450/- 10678 JCB (Case) 1 1761864/- No 132140 JCB(Case) 2 1761864/- No 132140 Laptop 168516/- Partly of Rs.88431/- 16017 Mobile Phone 18383/- No 1378 Sensor Power (Wirtgen) 8300000/- No 622500 Tata Hitachi PC 220 4618844/- No 346398 Vibratory Compactor (Wirtgen) 311 1950000/- No 146250 Vitara Brezza ZDI-V 881508/- No 66113 Total 17,66,114/- Narsingh Bindal ITA No530/Ind/2024 & C.O.No.7/Ind/2025 - A.Y.2018-19 Page 7 of 12 I am further satisfied that assessee has underreported his income to the extent of income of Rs.17,66,114/- hence penalty proceedings u/s 270A are being initiated separately. 2.7 That on para 9 of the aforesaid assessment order following is recorded:- “9. The assessee vide questionnaire dated 01.12.2020 was asked to furnish ledger extract of all the expenses debited to P&L A/c and further required to furnish complete details alongwith documentary evidences in respect of (a) Purchase with compete addresses and PAN of the parties from whom purchases made (b) Freight (c) Salary Expenses (d) Interest Expenses and also requested to elaborate the applicability and compliance to the TDS provisions as per the Income Tax Act, 1961 in respect of the above mentioned expenses. The assessee vide reply dated 26.03.2021 has submitted that with respect to details required for submission of this point, I would like to bring to your kind notice that the relevant documents are currently seized in possession of department of Goods and Services Tax (GST), Central and Central Excise office, Indore in connection with an ongoing investigation in some other matter. We have requested to release the same and a written application I also submitted with this office dated 24.03.2021 which was duly acknowledged on 25.03.2021. We will be able to submit the said documents as soon they are released from the GST department. Hence the assessee has failed to furnish the details called for as stated supra. The perusal of Profit & Loss Account of the assessee reveals that assessee has debited P&L Account by an amount of Rs. 11,03,28,615/- on account of direct expenses and Rs. 5,43,89,341/- on account of indirect expenses totaling to Rs. 16,47,17,956/-. There is every possibility that assessee might have inflated said expenses to reduce the burden of tax. Hence disallowance @ 5% in respect of above expenses is made and addition amounting to Rs.82,35,898/- is made to the returned Income of the assessee. I am further satisfied that assessee has underreported its income to the extent of income of Rs.82,35,898/- hence penalty proceedings u/s 270A are being initiated separately.” 2.8 That on para 10 of the aforesaid assessment order following is recorded:- Narsingh Bindal ITA No530/Ind/2024 & C.O.No.7/Ind/2025 - A.Y.2018-19 Page 8 of 12 “10. As discussed above addition of Rs.3,39,02,012/- was proposed to be made in the case of assessee and assessee vide notice dated 12.04.2021 was required to show cause on or before 15.04.2021 as to why addition of Rs.3,39,02,012/- as per details given above should not be made in his case. The assessee has not replied to the show cause notice dated 12.04.2021 issued by this office meaning thereby that the assessee has nothing to say in the matter and accordingly addition of Rs.3,39,02,012/- as discussed above is made to the returned income of the assessee. This order is being passed u/s 143(3) read with S.144B. In any notice/order or accompanying document issued after 1.04.2021, NeAC (National e-Assessment Centre) is to be read as NaFAC (National Faceless Assessment Centre).” 2.9 That in concluding para of the aforesaid assessment order following is recorded while computing total assessed income of the assessee. “In view of the above discussion, the income of the assessee is computed as under:- Income processed u/s 143(1) Rs.1,22,22,850 + Agri Rs. 4,35,913/- Addition as per para 7.1 above Rs.29,50,000/- Addition as per para 7.2 above Rs.2,09,50,000/- Addition as per para 8 above Rs. 17,66,114/- Addition as per para 9 above Rs. 82,35,898/- Total assessed income Rs.4,61,24,862/- Rounded off Rs.4,61,24,860/- + Agri Rs. 4,35,913/- “ 2.10 That the aforesaid assessment order is hereinafter referred to as the “Impugned Assessment Order”. 2.11 That the assessee being aggrieved by the aforesaid “impugned Assessment Order” preferred first appeal u/s 246A of the Income Tax Act 1961 before the Ld. CIT(A) who by the impugned order at para 6 has held as under:- Narsingh Bindal ITA No530/Ind/2024 & C.O.No.7/Ind/2025 - A.Y.2018-19 Page 9 of 12 “6. The appellant in its ground of appeal assailed the A.O in making addition on various account and framing the assessment without properly appreciating the facts of the case and giving reasonable opportunity. The grounds of appeal No. 1 & 2 are general and does not require adjudication. The appellant in course of the appellate proceedings is perused. The appellant filed additional evidence the same were forwarded to the AO to provide comments”. 3. Recording of Hearing 3.1 The hearing in the matter took place before this Tribunal on 1st April, 2025 when Ld. DR for and on behalf of the Revenue at the outset and threshold contended that Ld. CIT(A) ought to called for the remand report from Ld. A.O as additional evidence/ documents were filed and submitted before Ld. CIT(A) for the first time which were not before the Ld. A.O at the time of original assessment proceedings. These admittedly were fresh material and therefore it is essential to first know the view of the Ld. A.O on admissibility of additional evidence and then the comments of Ld. A.O on such additional evidence produced. In para 6 of the impugned order it is a recorded fact that the assessee had filed additional evidence and that the same were forwarded to Ld. A.O to provide for comments. Unfortunately in the instant case no remand report of Ld. A.O either on admissibility of documents nor any comment on additional evidence is on record. Under Narsingh Bindal ITA No530/Ind/2024 & C.O.No.7/Ind/2025 - A.Y.2018-19 Page 10 of 12 these tiring circumstances it would be just and prudent that this Tribunal remand the case back to the file of Ld. A.O for fair and just assessment in accordance with law. The Ld. AR then attempted to impress the Tribunal that impugned order is meritorious and began arguing case on merits in support of impugned order which was objected to by Ld. DR who insisted finally that matter should go back to Ld. A.O to which Ld. AR conquered and requested this Tribunal to pass order in accordance with law. 4. Observations,findings & conclusions. 4.1 We now have to decide the legality, validity and proprietary of the “Impugned Order” basis records of the case and rival submissions canvassed before us during the hearing. 4.2 We have minutely perused the records of the case and have examined the same. We have also patiently heard the rival submissions canvassed before us during hearing 4.3 We are of the considered opinion that “Impugned Assessment Order” which we have narrated in factual matrix (supra) was based on no evidence at all and hardly any Narsingh Bindal ITA No530/Ind/2024 & C.O.No.7/Ind/2025 - A.Y.2018-19 Page 11 of 12 information documents, evidences etc. were produced by the assessee before Ld. A.O who had passed the impugned assessment order (supra). Since the impugned assessment order went against the assessee as a natural collary an appeal was preferred. A written submission was filed before CIT(A) (Page 41 to 46 of P.B filed by the assessee) wherein at point 1 itself grievance about natural justice is raised in so far as impugned assessment order is concerned. Number of documents were enclosed therein as additional papers, documents evidences etc. with a request that same may please be taken on record as same were not available at original stage due to Covil-19 pandemic from the impugned order at para 6 (supra) it is clear that a remand report was sought from Ld. A.O however in records no remand report of Ld. A.O is on record. We notice that Ld. DR has rightly made grievance of same as law with regard to additional evidence under Section 46A of the Rules are clear and explicit. Further admittedly no remand report is on record. 4.4 In the premises drawn up by us aforesaid we are of the view that impugned order deserves to be set aside and accordingly we set aside same and remand the case back to the file of d. A.O to Narsingh Bindal ITA No530/Ind/2024 & C.O.No.7/Ind/2025 - A.Y.2018-19 Page 12 of 12 consider all the papers, documents which assessee has collated and then after giving an opportunity to the assessee the Ld. A.O to pass a fresh order in meritorious way 5. Order 5.1 Impugned order is set aside and matter is remanded to Ld. A.O to pass a fresh order on denovo basis. 5.2 Appeal of the assessee is allowed for statistical purpose. Cross Objection disposed off accordingly. Order pronounced in open court on 07.04.2025. Sd/- Sd/- (BHAGIRATH MAL BIYANI) (PARESH M JOSHI) ACCOUNTANT MEMBER JUDICIAL MEMBER Indore िदनांक / Dated : 07/04/2025 Dev/Sr. PS Copies to: (1) The appellant (2) The respondent (3) CIT (4) CIT(A) (5) Departmental Representative (6) Guard File By order UE COPY Senior Private Secretary Income Tax Appellate Tribunal Indore Bench, Indore "